Steps to Growth Capital Investor Readiness Skills

4.4 Determine Root Causes

Find Out Why It's a Problem

How many times have you identified the cause of a problem and fixed it, only to find out the following week that the problem is back? That usually happens because although you may have identified a cause, you probably didn't identify the root cause. To solve a problem you first need to find out why it's a problem and then make changes that will correct it.

Root cause analysis is a method used to determine the cause (s) of a problem. "The Five Whys" is a root cause analysis technique that will make it easier for you to identify possible solutions that may correct the real cause (s) of your problems.

Two Kinds of Remedies

There are two strategies for dealing with problems: you can find a temporary remedy or search for a permanent solution. And while permanent solutions are what you ultimately want to find, don't overlook the possibility that temporary remedies may buy you the time to look for the right long-term strategy. Just don't forget that the quick fix is only temporary. Otherwise the problem will most likely return, perhaps with even bigger repercussions depending on the stage/growth of your company.

Temporary Remedies

Here are three approaches to finding quick, temporary remedies. Think about each approach, and consider whether you have used it to solve an urgent problem with your business. How long did you allow the quick fix to continue before finding a more permanent approach? Are there any temporary remedies that have become entrenched in your business? Is this likely to cause difficulties in future?

As you can see, each type of action will fix your problem temporarily but won't provide the best long-term solution. That is, these actions will do until you take more thorough corrective action.

Permanent Solutions

Corrective action is a permanent change that will eliminate the root cause(s) of the problem. This action is the best solution because it will prevent the problem from recurring. Let's look, for example, at those bottles that weren't filling properly because of a leak in the hose (root cause). If you replace the hose (corrective action), the bottles will fill up; and you've solved your problem.

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